Until recently, however, there had been no formal analysis of the skyscraper curse. A new paper by Mr Barr, Bruce Mizrach and Kusum Mundra (all of Rutgers) investigates Mr Lawrenceâ€™s musings in detail. They look at the building of 14 world-record-breaking skyscrapers, from New Yorkâ€™s Pulitzer (which opened in 1890) to the Burj Khalifa, and compare them to American GDP growth (which they see as a decent proxy for the world economy).
If, as the skyscraper curse suggests, the decision to build the biggest towers happens near the peak of the business cycle, then you could use record-breaking projects to predict the future path of GDP. However, the range of months between the announcement of the towers and the business-cycle peak is large, varying from zero to 45 months. And only seven of the 14 opened during a downward phase of the business cycle (see chart). In other words, you cannot accurately forecast a recession or financial panic by looking at either the announcement or the completion of the worldâ€™s tallest building.
With such a small sample, it is tricky to draw firm conclusions. But the paper expands the sample to 311 by looking at the tallest building completed each year in four countries (America, Canada, China and Hong Kong). The authors then compare building height to GDP per person. They find that in all countries GDP per person and skyscraper height are â€œcointegratedâ€, a fancy way of saying that the two things track each other. In other words, developers tend to be profit-maximisers, responding rationally to rising incomes (and thus increased demand for office space) by making buildings bigger. While ego and hubris afflict the skyscraper market, the authors argue, its foundations appear sound.
â€œIt may well be the case that democracy and capitalism, which at moments in their youth were allies, cannot live together once both have come of age.â€ So wrote the historian EH Tawney in 1938.
Tawneyâ€™s prescient quote could well apply to London today, where the â€œBoris Boomâ€ is overseeing a version of extreme capitalism that is privatising vast swaths of the capital. Publicity so far has focused on the 250 planned skyscrapers, but at least as important is the fact that all this new development will be privately owned and privately controlled. Nine Elms in South London, for example, an enormous, 195-hectare private estate that will be home to the new ultra-high security American embassy, is typical of this new wave of privatisation. So is Londonâ€™s Olympic Park, which is private in as much as all the new communities within it, such as the Olympic Village, are also privately owned.
But does this mean that London â€“ boosted by the receipts of quantitative easing, a lax tax regime and foreign oligarch money â€“ is becoming the most private city in the world?
It is notoriously difficult to quantify and map the privatisation of space and place.Dubai, which must lay claim to being one of the most privatised cities in the world, is defined by its newness â€“ and it is this newness which is generally an indicator of how private a place is likely to be. This is because todayâ€™s dominant economic model is reflected by high-security, privatised plazas which house shopping areas, conference centres and luxury apartments in an environment less reminiscent of the public realm than an airport lounge.
How does it happen?
In general, the privatisation of public space in the west accompanied the traumatic transition from an industrial economy to one based on financial services, shopping, entertainment and â€œknowledgeâ€. This model began in 1970s America, where downtown waterfront areas that were former industrial heartlands were redeveloped into entertainment complexes: Baltimoreâ€™s Inner Harbour, described by the Urban Land Institute as â€œthe model for post-industrial waterfront redevelopmentâ€, is the prime example.
Londonâ€™s Docklands, once the hub of the UKâ€™s shipbuilding industry, became a centre for privatised financial services districts such as Canary Wharf, gated developments and private campuses such as the Excel, the enormous conference centre where the potential to â€œlock downâ€ the site ensures it is well suited to host such events as the Defence and Security Equipment International Exhibition.
War very often leads to heavily privatised areas, too. In downtown Beirut, the rebuilding of the city centre provided the opportunity for Rafik Hariri, a billionaire businessman and the former prime minister, to form Solidere, a company that has remodelled a 200-hectare area of the city centre.
Jerold S Kayden at Harvard has coined the term Pops (â€œprivately owned public spaceâ€) for these types of places, and found that there are 503 in New York City alone. One of the highest profile is Manhattanâ€™s latest tourist attraction, the High Line, which also appears to be the model for Londonâ€™s contentious Garden Bridge â€“ an urban â€œparkâ€ that bans all sorts of activities, closes for corporate events, does not allow political protest and requires groups of more than eight people to book ahead.
Indeed, the key question in determining how â€œprivateâ€ a city might be could be about access, rather than ownership. Zucotti Park, another Pops in New York, was for many months the venue for the Occupy Wall Street protests. Contrast that with Londonâ€™s Paternoster Square, home to the London Stock Exchange, where Occupy was quickly evicted when the owners took out an injunction. Political activity has been almost entirely squeezed out of Londonâ€™s square mile, and Occupy had no choice but to camp outside St Paulâ€™s Cathedral, on the only genuinely public space left in the city.
So while it may be impossible to name a city or a place as the â€œmost privateâ€ in the world, what we can say is that societies with high levels of inequality are also those where the privatisation of the public realm and life behind gates increasingly defines the urban fabric. In Britain and North America, where democracy remains the system by which we define ourselves, the spread of this kind of city space is extremely problematic, as it suggests that Tawney was right. While our leaders preach democracy, the increasingly private architecture of our cities is telling a more honest story.
For one thing, the location of Camp Mirage was always a closely protected secret. This was not done out of fear that terrorists would overrun the Canadian base, but rather to lessen the impact on the host nation regarding relations with its neighbouring states.
The United Arab Emirates remains a conservative Muslim state surrounded by many fundamentalist Arab countries that see the NATO intervention in Afghanistan as a Western war against Islam.
Further complicating matters is the fact that, since coming to power in 2006, the Harper government has publicly decreed, at every opportunity, its unwavering, unilateral support for Israel. For better or for worse, that is the path the Conservatives have chosen to follow, so it seems incredibly hypocritical that Harper would still expect an Arab nation to provide us the use of an airbase for nine years â€” for free.
In his exclusive interview, Harper also claimed that this experience has been a valuable learning opportunity for himself and his government.
"What this teaches us in (the) future and when weâ€™re looking at other options is: Donâ€™t get in a place where somebodyâ€™s going to try and use it to leverage some unrelated issue."
(Second note to Harper: Thereâ€™s no such thing as a free lunch.)
Iâ€™m not hearing anyone suggest an alternate payment option for all the services and access our military had to the Emiratesâ€™ airbase during the past nine years.
Surely, as a good ally, Canada will pony up the back rent!
Iâ€™m positive that, if such negotiations were initiated in good faith, to settle our account amicably, those Canadian officials seeking a new staging base in the region would find their job a whole lot easier.
30 days after 9/11, I was in Seattle listening to Leonard Sweet talk at Soularize. He was saying before others that 9/11 would change everything and he was right in many ways but I think people will look back at the credit meltdown in 2008 and the response of world governments in 2009 as a big or bigger world changing event. 9/11 may have defined the Bush presidency but the meltdown of the American banking system will be felt for decades. The world spent trillions of dollars it didnâ€™t have to minimize the impact of the banks implosion and we are going to be struggling with the consequences for years to come. According to the OECD, the worldâ€™s deficits are approaching 4% of the global GDP (meanwhile the U.S. deficit is around 11%).
Canada is already looking at five years of leaner government spending to help pay for the massive deficit we rang up in 2009.
â€œThe government’s approach will be clear. We won’t be raising taxes, but we will be constraining growth, making sure that growth is very much contained in the future, and that the tax base of the country can gradually recover,â€ Mr. Harper said in a year-end interview for CTV’s A Conversation with the Prime Minister , taped for a Boxing Day broadcast.
â€œAnd within four to five years, if we follow that path, we should be back to a balanced budget.â€
Mr. Harper’s view that his government will be able to chip away at deficits by squeezing the growth of public spending has been questioned by economists and by former officials with the Finance Department.
Former deputy ministers Scott Clark and David Dodge have already stepped forward to challenge the government’s plans for eliminating the deficit, which is projected to reach $56-billion this fiscal year. Mr. Clark has said that Ottawa will have to raise the GST, which Mr. Harper cut in 2006.
â€œI don’t think it’s very likely that they can balance the budget without some very severe spending restraint,â€ said Bank of Montreal deputy chief economist Douglas Porter.
2016 is to be the year that we are out of the woods but I wonâ€™t hold my breath. I foresee a higher GST and higher interest rates before this is all said and done. While Michael Ignatieff has a different approach to fighting the deficit, which he doesnâ€™t want to share, but he seems more comfortable spending instead of cutting.
â€œIf Iâ€™m prime minister, Iâ€™m going to be looking at the unemployment numbers first and deficit second,â€ Mr. Ignatieff said during the interview at Stornoway, the official Opposition leaderâ€™s residence. â€œWeâ€™re going to have a jobless recovery or weâ€™re going to have a recovery where thereâ€™s still a lot of people looking for jobs.â€
According to MSNBC, the impact of the United States deficit and stimulus package could be felt for decades. It isnâ€™t just a national issue, itâ€™s trickled down to the states and provinces. The State of California is looking more and more like it is going to default on itâ€™s loan. Itâ€™s debt is already a kind of trend setter in that it has been the first state debt to be reduced to junk status.
In addition to debt problems in California and North America, Morgan Stanley fears that the U.K. is headed towards a sovereign debt crisis in 2010. Actually Moodyâ€™s is predicting that more than the U.K. is going to have problems in the years ahead.
Moody’s warned on Tuesday that sovereign debt could be sold off sharply next year, which could lead to a wider downturn in financial markets, if central banks don’t implement what they term ‘perfect exit strategies,’ from the support they’ve been giving financial markets.
â€œIn an extreme situation a fiscal crisis could lead to some domestic capital flight, severe pound weakness and a sell-off in UK government bonds. The Bank of England may feel forced to hike rates to shore up confidence in monetary policy and stabilize the currency, threatening the fragile economic recovery,â€ they said.
Morgan Stanley said that such a chain of events could drive up yields on 10-year UK gilts by 150 basis points. This would raise borrowing costs to well over 5pc – the sort of level now confronting Greece, and far higher than costs for Italy, Mexico, or Brazil.
High-grade debt from companies such as BP, GSK, or Tesco might command a lower risk premium than UK sovereign debt, once an unthinkable state of affairs.
The Financial Times points out that the U.K., Dubai, Greece, and California is in good company. Japan has some sovereign debt problems of their own.
Yet Japanâ€™s fiscal problems are even more pressing. A debt trap appears when the rate of interest paid on government debt is higher than the economyâ€™s growth rate and the public revenues are insufficient to cover its financing charges. When this happens the fiscal position becomes unstable and the debt spirals upwards. This has been the case in Japan for several years. A bad situation has been made even worse by the global financial crisis.
Japanâ€™s national debt is fast approaching 200 per cent of GDP. The debt mountain is the result of prolonged economic weakness and successive fiscal deficits since the bubble economy collapsed in 1990. These problems are compounded by the fact that Japanâ€™s population is now shrinking. The economyâ€™s trend growth rate has fallen and tax receipts are shrinking, while welfare payments for pensioners are rising. Japanâ€™s debt trap, it seems, is structural rather than cyclical.
If you believe the stories out of Copenhagen, it has even lead to a reshuffling of the world order. As China owns more and more United States debt, it is increasingly calling the shots.
Since the fall of the Soviet Union in 1991, there has been one superpower, the U.S. Now there are two, as became abundantly clear in the chaotic closing day of the climate- change conference.
At that, Barack Obama was snubbed by the Chinese premier, Wen Jiabao. And then the U.S. was snookered by the Chinese.
As the New York Times reported Sunday in a riveting piece from the back corridor of the conference: "Twice during the day, Mr. Wen sent an underling to represent him at the meetings with Mr. Obama. To make things worse, each time it was a lower level official."
The first time, Wen sent his deputy foreign minister to a meeting of major heads of government, including most G8 countries (though not, apparently, Canada). Later on, the Times reported, "after a constructive one-on-one" between Obama and Wen, the Chinese premier sent his climate-change negotiator to another heads-of-government meeting that included the U.S. president.
There’s more. The White House set up an evening meeting with the presidents of South Africa and Brazil, as well as the Indian prime minister and the Chinese premier, and when senior staff arrived, as the Times recounted it, they "were startled to find the Chinese premier already meeting with the leaders of the other three countries" – without the president of the United States, the guy who called the meeting in the first place. According to the Times, Obama rushed to the meeting and called out from the doorway: "Mr. Premier are you ready to see me? Are you ready?"
You don’t see that in the newspaper every day, about the leader of the most powerful nation on Earth going cap in hand to his own meeting. It wouldn’t have happened on Ronald Reagan’s watch. His dignity, let alone his sense of the American president’s role on the world stage, wouldn’t have permitted it.
Welcome to the New New World Order.
This is a great photo by Bobby Yip/Reuters of unused shipping containers piled up at a storage depot in Hong Kong. Â The Chinese government is looking for places to store hundreds of thousands of unused containers expected to flood Hong Kong in the coming months due to Chinaâ€™s slow exports.
As long time readers of my blog know, I have a fascination with shipping containers as architectural elements and I can’t help but wonder if these hundreds of thousands of shipping containers can be better used for things other than littering up the urban landscape for the next couple of years (or more realistically, for a couple of decades).Â The U.S. military has used shipping containers for housing throughout the middle east and I don’t know why they could not be adapted on a large scale in suburban areas for high and as the photo shows below, low density housing at a much more affordable price than building from scratch.
While the idea of acres and acres of shipping containers is likely to make any city planner nervous, the Habitat 67 in Montreal is an example of what could be done on large scale. Â Something that could integrate the variety and diversity of private homes with the economics and density of a modern apartment building.
As in all recessions, there is an upside of down.Â Hopefully we can take advantage of it.